Film/TV thorn still stuck in GATT’s side

The audio-visual issue remained a potential deal-wrecker Sunday as fractious world trade talks in Geneva entered their crucial last hours, and President Clinton telephoned several European leaders in an effort to rescue the GATT accord.

Today, key negotiators including Sir Leon Brittan for the European Community and U.S. Trade Representative Mickey Kantor will square off once more in an attempt to thrash out remaining differences over textiles, agriculture, aircraft , financial services and anti-dumping rules.

Positions have meanwhile become so entrenched over the audio-visual issue, which hinges on strenuous French objections to unfettered U.S. access to Europe’s film and TV markets, that it is now thought to be off the immediate agenda.

Instead, sources said Sunday that teams from both sides are working to present an audio-visual “blueprint for accord” by the end of the day today, just 48 hours from the deadline for com-pletion of talks on the General Agreement on Tariffs & Trade.

The blueprint is likely to take the form of a tradeoff. Europe may attempt to persuade the U.S. that audio-visual should be dropped from GATT to form the basis of an entirely separate agreement to be reached later. In return, Europe will relent on a number of key U.S. demands in shipping and agriculture.

A high-ranking source said that given the broader trade issues riding on GATT — the deal will cover an estimated $ 4.5 trillion in international trade in agriculture, industrial products and services — a dispute centered on entertainment stood “absolutely no chance” of sinking a deal.

It was understood Sunday, however, that the Motion Picture Assn. of America, led by prexy Jack Valenti and claiming to have the full support of President Clinton, will continue to lobby hard for audio-visual’s inclusion in a GATT accord, which the MPAA sees as vital for Hollywood’s future health.

By phone Sunday, Clinton pressed French Prime Minister Edouard Balladur, British Prime Minister John Major and German Chancellor Helmut Kohl to get an agreement by Wednesday.

Separately, the same group of studio chiefs and guild execs who met with Clinton in October fired off a letter to the White House urging the president not to sign any accord that leaves Hollywood out in the cold.

In the opposite corner, France has consistently lobbied that as a “cultural” issue, film and TV should not be subjected to free-market forces. The French rigidly oppose U.S. requests that Europe drop the current local-content quotas and subsidies for domestic producers.

At a separate EC conference Saturday in Brussels, France won from EC leaders a strong pledge that any GATT accord must treat Europe’s film and TV industries as “exceptional and separate, now and in the future.”

Unexpected demands made by Mickey Kantor during last week’s negotiations have apparently served to further harden the French stance and win over support from previously lukewarm EC trading partners. In return for an unspecified “concession on culture”– taken to mean some bending on quotas — Kantor asked that the U.S. be entitled to a proportion of both European film subsidies and revenues accrued from Euro blank tape levies.

Though seen by one EC lobbyist as “something that was thrown in at the last moment to get a reaction,” Kantor’s late requests saw the audio-visual talks break up angrily and have led to the current deadlock.